Taking Calculated Risks

By Scott Signore

Earlier this week, we issued a press release about growth in our office in Providence.  In addition to celebrating our office’s sixth anniversary, we announced that we were recently selected to work with two leading technology companies in the area, Numark and Aquabotix, Inc.  We are proud of our relationship with these two companies and thought to share the good news.

And, our timing was good.

This week, the Ocean State is in need some good business news.

It’s a gross understatement to describe the relationship between 38 Studios, the video game company owned by former baseball star Curt Schilling, and those responsible for financial happenings in the State of Rhode Island, as having turned sour.  The strangely hyped loan guarantee that was coordinated in conjunction with the move of Schilling’s company from Maynard, Massachusetts, to Providence has gone badly awry.  While the company has launched a revenue-generating product with some success, it is now failing to pay its bills. 38 Studios recently missed a $1.1 million loan payment to the Ocean State, and just yesterday delivered a bad check when trying to make good. It’s being reported that the company is no longer making its payroll, a likely indication of a storm greater than the one that surprised the state in 1938.

Like so many who work in business, one of the many lessons learned from the past decade is the need to minimize risk. It appears, however, that perspective wasn’t shared by the lawmakers in Rhode Island who made a bullish move to support a young start-up with unrealistic growth expectations in a hugely competitive market. I’m fearful that Rhode Island lawmakers’ love of the Red Sox – and a debt owed to man who once pitched with a bloody sock to end an 81-year curse – got in the way of sound decision making.  In any circumstance, it appears this gamble isn’t paying off and Rhode Island taxpayers are on the hook.

Fortunately, however, we’re still making sound business decisions – and so are technology companies who are deciding to work with us.